The Wall Street Journal has given former Federal Reserve Chairman Alan Greenspan a careful platform so he can justify himself.
The most nauseating thing about this “interview” is it gives us few direct quotations. It mostly summarizes points. Obviously, this is simply the defense that he wishes public to swallow about himself and that the “reporter” Alexandra Wolfe dutifully produced, no doubt allowing him to edit and “correct” the final draft. If we were given a transcript or (better) a recording of the actual interview we might have something that could be valuable. This format maximizes the distance between the reader and what was said.
Greenspan brings up Ayn Rand for the most trivial of reasons. This is his and the WSJ’s false flag attack against the free market and the Tea Party. Rand for all her problems did not want central banking; she advocated a gold standard or even a gold currency. As Chairman of the Federal Reserve, Greenspan’s job was opposed to her principles. Any “agreement” with her on some matter of deregulation or “libertarianism” is just a diversion. Greenspan’s economic disaster has nothing to do with the market economy.
Our bubble troubles have everything to do with low interest rates. Greenspan claims he never heard of this idea until 2007 when a friend of his pointed it out. He also pretends that no economists saw the crisis coming. Of course, he is defining “economist” as one of his pals. The truth is there were plenty of economists predicting the collapse because they knew low interest rates were creating a boom that would be followed by a bust. Anyone looking at Mish’s archives or the papers, books, and speeches of the Von Mises Institute will see plenty of evidence.
Greenspan is spinning lies and nonsense to make it clear that, no matter what disasters he led us into, we must still trust him and his friends. The idiotic “interview” expects us to take an interest in his “growth” as an “economist” and value his word-garbage as precious intellectual discussion.
Greenspan claims that fear and euphoria are irrational elements in human behavior that he didn’t account for. On the contrary, he induced investment euphoria by pushing down interest rates. The fear was a rational (not “irrational”!) response when investors, rather than seeing prosperity develop, felt the pressures of inflation and experienced a collapse in demand.
One of the most disgusting and ridiculous claims (given toxic power by the mention of Ayn Rand) is Greenspan’s attack on entitlements. I hate entitlements. But Greenspan’s alleged discovery is another self-serving piece of disinformation.
Mr. Greenspan’s biggest revelation came one day about a year ago when he was playing with gross domestic savings numbers. What he found, to his surprise and initial skepticism, was that an increase in entitlements has closely corresponded to a decline in the country’s savings.
That is not the real cause. Greenspan shoving interest rates down made a saving account about as helpful as stuffing cash into a mattress. People had to either push their savings into higher risk areas like the stock market or the false promise of their house’s value, or else simply give up and spend it.
So Greenspan’s lie allows Wall Street to keep its easy money drug that diminishes the Middle Class, while entitlements are taken away too? Entitlements need to be ended along with the Federal Reserve!
A final comment: Greenspan supports TARP. What more do you need to know? He is a planetary thief who belongs in prison, not at his DC parties (though putting them all in jail together is worthy of consideration).